The candidates and media are getting the Iowa ethanol debate all wrong

Source: By Michelle Ye Hee Lee, Washington Post • Posted: Tuesday, January 19, 2016

(AP Photo/Matt Rourke)

Question: “Are you going to jerk the rug right out from underneath it, or are you going to let it expire in 2022 like it should, and then stand on its own?” […]

Sen. Ted Cruz (R-Tex.): “Maggie, you rightly noted that the RFS is set to expire in 2022. When I said we should phase it out, I said it should be a five-year phase-out — a phase-out from 2017 to 2022 is five years.”

exchange during a campaign event in Cherokee, Iowa, Jan. 6, 2016

Voters in corn-growing Iowa have confronted Cruz about his stance against the federal renewable-fuel mandate, which sets the minimum amount of corn-based ethanol to be mixed into gasoline to reduce or replace the amount of fossil fuel.

Iowans largely are supportive of ethanol mandates, set through the Renewable Fuel Standard (RFS) passed by Congress in 2005. And Cruz now finds himself explaining to voters in the first-in-the-nation caucus state why he has proposed phasing out the mandate by 2022.

The Fact Checker will explore an important distinction in the rhetoric over the ethanol mandate that has been mischaracterized by politicians, including Cruz, and even members of the media. The premise set in the exchange above is that the ethanol mandate is “set to expire by 2022.” But there is no actual end date to the program in statute.

So what is going on? It’s a wonky topic, but it’s really not as complicated as it may seem — so stick with us.

The Facts

Cruz is not the only candidate who has mischaracterized the “expiration” of the RFS. Several other Republican candidates have described the mandate in similar ways. Two examples:

  • When asked what he would do about the RFS in a Jan. 12, 2016, interview with the Des Moines Register editorial board, former Florida governor Jeb Bush (R), said: “In 2023, whenever the law expires, that’s when the conversation [about the Renewable Fuel Standard] should take place.”
  • Former business executive Carly Fiorina said at the Iowa Corn Growers Association’s meeting in August 2015: “Let us establish 2022 as the end point, let’s have a level playing field from now until 2022. But in 2022, the government needs to get out of all this. Fossil fuels, sugar, corn subsidies — government needs to get out of all it.”

Congress created the RFS through the Energy Policy Act of 2005. This law mandated the expansion of renewable energy in the U.S. gasoline supply, requiring increasing amounts of biofuels to be mixed into the supply each year. Congress set the minimum volume of renewable fuel required each year, as shown below (from the Energy Independence and Security Act of 2007):

(Courtesy of Legal Information Institute, Cornell University Law School)

As you can see, the table stops at 2022. This is what most people are referring to when they say that the RFS is “set to expire” in 2022.

But this is misleading rhetoric. The mandate doesn’t go away at all. In fact, statutes require after 2022, the Environmental Protection Agency set the minimum levels through regulations. The EPA administrator must use six criteria to set the new standard beyond 2022, such as the impact of renewable fuels on the energy security in the United States and on the cost of gasoline for consumers.

The law also makes it clear that the new levels set by the EPA can’t be lower than the amount required for 2022. [Update: We had written that EPA can’t lower the amount beyond 36 billion gallons of renewable fuel. But EPA has authority reduce the volume. The law allows EPA to issue a waiver to set the volume at a lower level than specified in the law, essentially “resetting” the volume. EPA has not used this authority yet. The Pinocchio Test is also corrected to reflect this change.]

“The statutory volumes under the RFS only go through 2022. For all years after 2022, EPA is directed to established volumes after that time,” said EPA spokeswoman Melissa Harrison.

The program is set to go on indefinitely unless repealed by legislation. And that’s exactly what Cruz supports: a five-year phase-out for the RFS, ultimately ending in a repeal of the mandate.

“The RFS has proven unworkable and costly. Its mandate that an increasing percentage of renewable biofuels be blended into gasoline and diesel each year ignores the reality there are insufficient amounts of some biofuels to meet the standard,” according to a news release on Cruz’s Senate website about his stance against the RFS. “It imposes significant costs, and offers few, if any, benefits. The RFS should be phased out so producers and refiners can focus on maximizing domestic resource potential.”

On the campaign trail, Cruz has framed his opposition to the renewable-fuels mandate as his fight against Washington. In a Jan. 6, 2016, op-ed in the Des Moines Register, Cruz argued that he is fighting against the EPA from regulating ethanol, and instead creating a level playing field without the mandate and without any energy subsidies.

There is no set start time to the five-year phase-out in Cruz’s proposal. If elected president, Cruz wants the phase-out to begin when his term starts in 2017, and last through 2022.

“If they did not pass legislation phasing out the standard, as you note, the standard shifts from a legislative mandate to a ‘future rule’ set primarily by EPA,” said Cruz’s campaign spokesman Rick Tyler. “Under a Cruz administration, in 2022, in the absence of phase out legislation, the standard would be set to zero.”

The issue “absolutely has been” misreported, said Chet Thompson, president of the American Fuel and Petrochemical Manufacturers (which opposes RFS): “The program does not expire in 2022, it simply shifts to EPA the obligation to specify the volume requirement, which the statute does now.”

The Pinocchio Test

This is a wonky topic, and that’s precisely why confusion like this occurs. As shown in the exchange we’re fact-checking, the voter presents the premise that the ethanol mandate will “expire in 2022.” It will not expire in 2022 unless the law is repealed. Yet Cruz answers her by confirming the inaccurate premise: “You rightly noted that the RFS is set to expire in 2022.”

Then, Cruz goes on to say that it should actually be phased out by 2022 instead.

Here are the facts: Cruz wants to phase it out from 2017 through 2022, with a full repeal by the end of 2022. But unless Cruz — or whoever the new president is — is able to convince Congress to repeal the current law, the ethanol program will continue. The current standards set in statute lasts through 2022, and after that, the EPA will decide on the levels from 2023 and beyond.

Two Pinocchios